Is AlcaLu Seeking a New CEO?
The Alcatel-Lucent (NYSE: ALU) board is believed to have begun its search for a new CEO to replace Pat Russo. Ben Verwaayen, the outgoing CEO of BT Group plc (NYSE: BT; London: BTA), has been identified as one of the best qualified potential candidates, according to Light Reading sources and a French business newsletter. (See Verwaayen Set to Leave BT.)
Late last week French online business newsletter La Lettre A reported that AlcaLu has initiated the recruitment process, with Verwaayen identified as one candidate that fits the equipment giant's needs.
Light Reading sources also believe that the search for a new CEO has begun, and agree that Verwaayen would be a prime target for the giant equipment firm, though they also believe that a number of French executives with the relevant experience will be approached. Once source cited former Orange (NYSE: FTE) CEO Thierry Breton as another potential target. (See France Telecom's Got a New Chief.)
The sources, who wished to remain anonymous, say pressure from investors to replace Russo has intensified: Since the company was formed by the merger of Alcatel and Lucent in late 2006, investors have seen the value of their shareholdings drop by 56 percent following a string of disappointing quarterly reports and profit warnings. (See AlcaLu Reports Q4 Loss of €2.6B, AlcaLu Cuts 4,000 More Jobs, AlcaLu Cuts 2007 Outlook by $1.25B, Alcatel-Lucent Slumps on Q2 Loss , and Merger Tears Into AlcaLu's Sales.)
On its first day of trading, Dec. 1 2006, AlcaLu's share price stood at €10.12 -- today it is trading on the Paris exchange at €4.39.
In addition, some investors are believed to be frustrated that the company's top management team has not been injected with any new blood: When the company reshuffled its executive structure and Carrier Group in late October 2007, Russo shuffled the existing management pack, but did not recruit any outsiders. (See Russo Shakes Up AlcaLu's Top Team and AlcaLu Revamps Its Carrier Business.)
Alcatel-Lucent declined to comment on whether a CEO recruitment process had been initiated, stating that it doesn't comment on rumor and speculation.
This whole process is believed to be in its early stages, say sources. Verwaayen, who is set to leave BT at the end of May, has been cited as a prime target by at least one source, though another says there hasn't to date been any buzz inside AlcaLu about the BT man as a potential future leader.
Verwaayen's office at BT declined to comment on whether he has been approached about the post.
The chatter about AlcaLu's recruitment processes comes just as the company is set to announce its first quarter results, which are expected to show yet another loss. The vendor is to issue its earnings report early Wednesday, April 30.
Apart from being available, now that he is clearing his desk at BT, why would Verwaayen be regarded as a decent candidate to take the helm at AlcaLu? The industry sources contacted by Light Reading say the straight-talking Dutchman is ideally suited to the job for two main reasons.
First, he has proven himself capable of turning around the financial fortunes of a telecom company -- BT was in dire straits when he took over in 2002, but has prospered under his leadership.
Second, Verwaayen has "history" with the vendor, having been a senior executive and the vice chairman of Lucent, with responsibility for global marketing, sales, and services, in the four and a half years prior to his appointment as BT's CEO in late 2001. (See BT Snares Lucent Exec and Lucent Streamlines Management Team.)
Before he left Lucent he was believed to have been one of the lead candidates to become the vendor's CEO, but was passed over by chairman Henry Schacht, in favor of Russo. (See Lucent's Next Leader.)
Of course, this isn't the first time that talk about Russo's tenure as AlcaLu CEO has emerged. In early October last year, media reports that Russo's position was under threat were rife, but the board issued a statement backing her and her team. (See AlcaLu Board Backs Russo.)
— Ray Le Maistre, International News Editor, Light Reading